Nike’s stock surged significantly when the market opened on Friday following the announcement that the company plans to relocate some of its manufacturing processes away from China. This strategic shift is an effort to navigate the impending tariffs in China, but Nike has cautioned that the tariffs implemented by the Trump administration are still expected to cost the company approximately $1 billion before they can adjust their operations. Key adjustments include implementing strategic price increases in the U.S., which are set to begin this fall.
The retail giant Nike is not alone in announcing upcoming price hikes coinciding with the back-to-school shopping period. Recently, Walmart also revealed that customers would experience price increases over the coming months due to elevated costs resulting from tariffs. This heightened cost is, in part, why both companies have spoken out about the impact of tariffs on consumers.
Nike is focusing on mitigating tariff risks by decreasing its production in China, which currently accounts for about 16% of its footwear imported into the U.S. According to Nike’s Chief Financial Officer, Matthew Friend, this production percentage is set to be reduced to a high-single-digit range by the conclusion of fiscal 2026, as production shifts to other locations.
Additionally, U.S. President Donald Trump and Commerce Secretary Howard Lutnick announced an agreement between the U.S. and China concerning trade, though specific details were scarce. Earlier, Nike, along with companies like Adidas, Under Armour, and Puma, had addressed a letter to President Trump requesting exemption of footwear from reciprocal tariffs, indicating that such tariffs could significantly affect consumers at retail points.
In line with their approach to seasonal planning, Nike has stated through Matthew Friend that they will start implementing “surgical” price increases, commencing in the upcoming fall season. The anticipation of higher prices tied to tariffs is causing concern among families who already face substantial expenses related to sports participation.
On Thursday, Nike reported earnings that surpassed Wall Street estimations, with a quarterly profit of $211 million, or 14 cents per share, and revenue reaching $11.1 billion. Despite these financial successes, the company faces challenges as American consumers cut back on spending due to concerns about the U.S. economy’s trajectory. Neil Saunders, Managing Director of GlobalData, noted a “boredom factor” affecting Nike, even as it remains a dominant player in sportswear.
Furthermore, in markets such as China, where market growth has slightly decelerated, Nike is experiencing difficulties, alongside some rising anti-U.S. brand sentiment, which complicates the situation. Despite these challenges, Nike, headquartered in Beaverton, Oregon, saw its shares increase by 15% as the trading day began.